He who pays the piper...

NEW LABOUR has reluctantly admitted receiving three individual donations of £2 million each. The three donors - supermarket magnate and government minister Lord Sainsbury, wealthy publisher Lord Hamlyn and ex-Tory backer Christopher Ondaatje - are further proof of Labour's subservience to big business: and high time the trade unions break their financial links with Labour.

The Socialist presents a series of articles on the funding of the establishment political parties

THE THREE £2 million donations to New Labour has put the funding of political parties back in the spotlight.

But these donations are the tip of a sleazy iceberg that shows how New Labour is in hock to big business.

It's not only that Labour gets huge donations from wealthy individuals in return for honours. Big business gets its reward in the form of contracts, lax government regulation and, most importantly, a government that carries out a pro-big business agenda, ideologically insistent on privatisation, cuts and anti-working class measures.

Lord Hamlyn is one of eleven people who have been honoured by new Labour after donating more than £5,000 to the party between 1996 and 1999 (The £5,000 figure is all the party has to list in its record of these donations, the actual figure could be as much as Hamlyn's £2 million).

These included another £2 million donor and a government minister Lord Sainsbury; Granada group chairman Alex Bernstein; and Northern Foods Chairman, Christopher Haskins, who was made a Lord in 1998 after regularly donating large sums to the party from 1996. He is now chairman of the Cabinet Office's Better Regulation Task Force.

But it's not just a matter of wealthy individuals donating to gain the baubles of office. As the examples above show these individuals want positions of power with a direct link to their areas of interest. Private companies also operate in the same way by donating to Labour.

A former member of New Labour's national executive committee (NEC), Liz Davies, spoke at the Socialist Party's annual education event Socialism 2000 last year on precisely this subject. She had been pursuing government ministers and Labour officials at NEC meetings for them to have ethical guidelines about who the party should accept donations from - particularly big business. After a lot of pressure a review was held over two years which has so far produced no recommendations! Liz revealed the following:

Big business now contributes a third of the party's funds - more than the trade unions for the first time in the party's history. Over £2 million was raised from big business buying stalls and seats at gala dinners at last year's Labour Party conference.

All the major supermarkets - Sainsbury, Somerfield, Safeway and Tesco - have contributed. Is it mere coincidence that New Labour allows these giant companies to be the arbiters on pricing and health matters relating to food standards after it has severely watered down its proposals for a Food Standards Agency?

All the major utilities - BT, the water companies, British gas and Scottish Power among others - have all donated. These companies are all subject to government regulation and also have to bid for government contracts.

Many of the rail companies donate such as Connex and Railtrack - again their relationship with the government is similar to the utilities.

Mobile phone companies that are awarded licences by the government also donate as does Novartis a producer/purveyor of GM foods and McDonald's which has been slammed for its employment practises by the High Court.

Enron Europe, a major player in the British water industry, whose US parent company has been convicted of labour law infringement and charged with human rights abuses by Amnesty international, also donates.

Raytheon is the third largest arms dealer in the world. It sells arms to oppressive regimes like Saudi Arabia, Malaysia and Indonesia as well as to the US Pentagon. Since donating to New Labour it has been awarded a large contract by the Ministry of Defence.

When New Labour came to power in 1997 it announced an ethical arms policy. A likely casualty from this policy was British Aerospace (BAe), which had a contract to deliver 14 Hawk Jets to Suharto's repressive Indonesian regime.

New Labour foreign secretary Robin Cook could have stopped the delivery of those jets in June 1997 but didn't. In 1998 BAe gave money to New Labour and the jets were delivered and seen in action over the East Timor capital, Dili, by observers in 1999 during the conflict and bloodshed there, when the East Timor people were engaged in a referendum over separation from Indonesia.

Arms sales to Indonesia were temporarily stopped - for four months - after the massacres in East Timor but were quietly resumed in early 2000.

State Funding - Where do socialists stand?

IN THE recent USA Presidential and Congressional elections the Republicans and Democrats spent nearly $4 billion, with most donations coming from big corporations or wealthy individuals.

It's clear that money talks: 92% of the Representatives and 88% of the Senators elected in the US were the candidates who spent the most money. Radical Presidential candidate Ralph Nader, who secured nearly 3% of the national vote, could only match a fraction of the spending by the two big parties.

Likewise, the Socialist Party, which will be contesting a small number of seats in England and Wales at the next general election, will struggle to raise enough election funds from its members and supporters - many of whom are on low incomes.

Not so with New Labour and the Tories whose rich backers will expect favours in return for their donations, as the Bernie Ecclestone and Michael Ashcroft affairs revealed. (F1 motor racing boss Ecclestone donated £1 million to Labour's coffers who 'coincidentally' exempted the sport from a ban on tobacco advertising. Tory party Treasurer Michael Ashcroft bankrolled the party as a tax exile living in Belize - he then was awarded a life peerage).

To stop this 'sleaze-democracy' and to be fairer to smaller political parties, some people say: 'why not have state funding?'

Corruption and capitalism go hand-in-hand. State funding won't stop the bosses' continuing to 'buy' politicians as the recent political scandals involving former Christian Democrat leader Helmut Kohl in Germany and President Jacques Chirac in France show: where both countries have state funding.

Socialists have previously opposed state funding. State funding could be used to compromise the independent political position of workers' and socialist parties.

Pressure would be brought to bear on such parties to conform to the capitalist status quo, rather than campaign against it, because of their dependence on the state for cash.

Also the acceptance of large sums from the state could give the impression that workers' representatives are no different from other capitalist politicians and are riding the state funding gravy train.

However, elements of state funding already exist. For instance all candidates' general election manifestos are delivered free by the Royal Mail.

If state funding was more widely introduced it's likely, depending on circumstances, that socialists would utilise the funds provided that they did not become dependent on these funds to keep the party viable.

In many European countries there are systems of state funding based on parties' popular mandate, ie a proportion of the votes received or election of candidates.

Of course the devil is in the detail. Clearly, we oppose state funding for fascist parties.

For smaller parties to qualify for funding, say, by the election of candidates, there would also have to be a system of proportional representation in elections.

But whether or not state funding is introduced, the resources of our party will grow along with support for socialist ideas amongst the working class.

"Rise with your class, not out of it"

WE PUT forward the demand 'For a Workers' MP on a Worker's Wage' because we want our representatives to be democratically accountable to the working-class and the movement that got them elected.

Workers' representatives whether an MP or trade union official should only take the average wage of the people they represent. They should also be subject to immediate if those they represent are dissatisfied.

Coventry Socialist Party councillor and former MP Dave Nellist spells out what our demand means in practice:

"The one thing, above all, which marked off the three socialist MPs in the 1980s - Terry Fields, Pat Wall and myself - and for which we're still remembered today, was that by living on the same wage as the people we represented it was clear we were in Parliament for what we could do for people, not for what we could get out of it for ourselves.

"My own wage was set at the same level as the average toolroom worker's rate across 10 factories in Coventry. That was about 40% of an MP's wage (or in other words, MPs were on about two-and-a-half times a skilled worker's rate). Because of that, unlike almost all other MPs, we were not insulated from the day-to-day financial pressures faced by other working-class families.

"Over my nine years in parliament we were able to donate over £50,000 of my take-home wages to campaigns and working-class appeals.

"Being able to represent working people and their families as an MP or full-time union official should be a privilege, not a career move. Good representatives will share in the improvements they help to achieve for their constituents - and should equally share in the hardships. Or as the famous Scottish Marxist, John Maclean, once said: "Rise with your class, not out of it".

The Tories: Paragons of sleaze

THE TORIES, the traditional big-business party, received massive corporate donations in the past but the supply dried up during the 1990s.

John Major's spectacular defeat in 1997 brought company donations to the Conservative Party crashing down. In the equivalent year of the last parliament, the Tories raised £2.5 million from companies.

In 1998-99 they got £605,000 from 38 firms. Last year 31 companies gave a total of only £359,059. Labour Research magazine said it was the lowest level of corporate donations to the Tories since records began.

Now road builders Tarmac, which gave Hague's party £40,000 in 1998-99, gave nothing in the last financial year. Why should they? The latest figures show that Labour is completing more road schemes than the Tories ever did.

The Tories say they are now more and more dependent on wealthy individuals - like Lord Ashcroft, the billionaire party treasurer who gave his party £1 million last year plus £390,000 worth of gifts in kind including staff and the use of aircraft.

Ashcroft made money running "flag of convenience" ships which sacrificed safety for quick profits. This former tax exile never used to pay tax anywhere until he was forced to do so to become a peer. This paragon of virtue has given the Tories over £3 million and collected far more. The Tories are still sleazy.

Fund the fight for socialism

CAPPING GENERAL election spending by political parties to £20 million might make Labour and the Tories jittery but its no impediment for the Socialist Party!

Our concern is having enough funds to stand candidates and at the same time continue our campaigning work - fighting privatisation, job losses and cuts in services - and building our socialist international organisation, the Committee for a Workers' International (CWI).

Every reader of The Socialist can help by donating to our £40,000 special campaign fund.

Many members have pledged a week's income or more - a fantastic commitment to socialism. But we equally value every donation whether it's £5 or £500.

As we explain in this centre page feature the Socialist Party isn't funded by millionaire businessmen - nor would we want it! We depend entirely for resources on our working class supporters.

Please give generously to our funds.

Free the funds

IN 1999 the trade unions donated nearly £6 million of their members dues to New Labour.

And in return? Most of the anti-trade union laws remain on the statute books. Privatisation of health, education and other public services is being speeded up. The government has done nothing to stop the haemorrhaging of jobs in manufacturing industry.

New Labour no longer represents the interests of working-class people. Instead it has become yet another party of big business.

Trade unionists are questioning the relationship with New Labour and raising the issue of alternative political representation for workers.

At the CWU conference, delegates voted to 'withdraw moral and financial support' from New Labour, if they proceeded to privatise the Post Office. Debates have opened up in the RMT, FBU and other unions about loosening the link with New Labour.

Workers in struggle, like the Tameside carers, have stood candidates in opposition to New Labour councillors involved in attacking their jobs and conditions. London Underground workers also stood their own anti-privatisation candidates in the London assembly elections and supported Ken Livingstone for Mayor in open defiance of the New Labour leadership.

Free the Funds is a Socialist Party initiated, cross-union campaign to free the unions' political funds so that they can be used to back candidates and parties whose policies defend members interests and campaign for a new, mass party which would represent the real interests of working class people.

Political Parties Act - full of holes

THE POLITICAL Parties, Elections and Referendums Act will come into force on 16 February. This requires the names of donors and the size of their donations to be disclosed to an 'electoral commission'.

The Act follows the 'Neill' report by the Committee on Standards in Public Life. The report criticised the 'arms race' between political parties which resulted in Labour and the Tories spending £54 million between them at the last general election.

The Act requires all donations over £200 to be recorded by political parties and for quarterly reports to be prepared for the Electoral Commission listing donations of over £5,000 or which have come to over £5,000 in a calendar year.

Spending per constituency for one year before a general election is capped at £30,000, around £20 million per party. (Possibly £15 million for this election because it will apply to less than a full year.)

But experience in the USA has shown that limits on electoral spending can easily be side-stepped by the big parties. Although some donations directly to political parties are regulated and have to be declared, the raising and spending of unregulated, so-called 'soft money' has escalated. In the last Presidential election, the Republicans and the Democrats raised over $400 million between them in this way - mostly spent on advertisements on single issues in key 'swing' states.